The Psychological Effects of Poverty on Parenting

To test whether poor parents have a lower propensity to invest in their children due to cognitive load, we resort to survey experiments, priming some parents – but not others – about money, and then presenting them with the opportunity to undertake a costly educational investment in their child. The hypothesis of interest is whether those who are primed undertake such investment to a lesser extent.

We randomly assign subsamples of the subject pool to other sources of negative news: either a monetary shock of much lower magnitude, or a non-monetary shock. Moreover, we also try to delve more deeply into the mechanism, by varying the source of the large monetary shocks – either related or unrelated to educational expenses –, to address the possibility of mental accounting.

We create a decision that involves opportunity costs, but which does not require cash on hand. Specifically, we offer parents the choice between a free educational product for a longer period, or the same product for a shorter period coupled with an immediate top up in airtime credit. The idea is that if those who are primed about money choose the short-length plan, it cannot be because they were credit constrained to choose the longer-length one.

We present parents with a decision about a real product. We offer enrollment in an SMS campaign that delivers content to support parenting, an increasingly popular intervention to foster parental engagement (York and Loeb, 2015), for either 2 or 4 months of the school year. Beyond having real consequences, we can actually measure the impact of parents’ decisions on their children’s education outcomes – attendance, grades and drop-out rates –. The psychological impact of poverty on those outcomes is then estimated by using priming status as an instrumental variable for parents’ decisions between shorter- or longer-length plans.

We also cross-randomize how the educational investment is presented for parents (framed as either “good for your child” or “with potential to increase future wages”). We test whether the monetary framing increases uptake of the longer-length plan, particularly for the subjects primed about money.

2016-06-27

2016-12-02

Differences in take-up of the longer-length SMS as a result of priming and framing (first stage), and difference in attendance, grades and drop-out rates across group with and without the longer-length SMS program (second stage)

Survey experiments are randomly assigned at student levels, within a sample of 60 Brazilian public schools, in order to estimate the psychological impacts of poverty on educational investments.
Using phone surveys, at the beginning of each call we randomly assign parents to one out of four possible questions, asking subjects to think about the consequences of: (i) a small monetary shock (a USD 10 unanticipated expenditure with a broken fridge; the control condition), (ii) a large monetary shock unrelated to education (a USD 100 unanticipated expenditure with a broken fridge), (iii) a large monetary shock related to education (a USD 100 unanticipated expenditure with school uniform and materials), and (iv) a large non-monetary shock (a unanticipated 7-week stop in water supply; the placebo condition).
Following that, we offer parents the opportunity to undertake an educational investment, by choosing the length during which they will be enrolled in an SMS campaign that delivers content to support parenting (at no cost). Subjects must decide between 2-months enrollment coupled with an immediate airtime credit top-up of 10 dollars, or 4-months enrollment with no top-up.
We cross-randomize how the educational investment is presented for parents (framed as either “good for your child” or “with potential to increase future wages”).

Randomization done in office by a computer

Individual

No

~1200 parents

~1200

~150